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Bristol-Myers bags biotech upstart Padlock in $600M autoimmune deal

Bristol-Myers Squibb ($BMY) has struck a $600 million deal to buy out the biotech startup Padlock Therapeutics and its autoimmune R&D platform.

Fostered by Atlas Venture and a band of dedicated biotech investors, Padlock set out to disrupt the entire autoimmune field with a new approach to preventing a process in which the immune system mounts an errant attack on healthy tissue.

Diseases like rheumatoid arthritis can be stopped by halting protein citrullination, Padlock's founders believe, in which healthy tissue becomes an antigen targeted for an immune system attack. And you can stop the process by targeting enzymes called protein-arginine deiminases, or PADs, with the small molecules the biotech hunted for.

"I think that we may have gotten autoimmune disease entirely wrong for all these years," Padlock CEO Michael Gilman told FierceBiotech last year, when Padlock was named a Fierce 15 company.

Bristol-Myers is paying $225 million in an upfront and near term milestone payments with another $375 million on the table in longer term milestones. The deal marks a great payback for the venture founders--including Index Ventures, Johnson & Johnson ($JNJ) Development and MS Ventures, the biotech investment arm of Merck KGaA--who put up a $23 million round in late 2014 to fund the Cambridge, MA-based enterprise.

Part of that cash went to acquire drug candidates from GlaxoSmithKline back in the spring of 2015.

Gilman is a high-profile figure in the Cambridge hub. He headed up Stromedix before Biogen decided to buy up the fibrosis startup, and he has close ties to Bruce Booth's venture team at Atlas, which has launched a string of startups over the past two years.

BMS CSO Francis Cuss

"Targeting PAD enzymes has the potential to be one of the most innovative mechanisms for treating autoimmunity which both strengthens and accelerates our immunoscience pipeline," said Francis Cuss, the CSO at Bristol-Myers Squibb. "By pursuing a treatment approach which may address disease progression earlier, we hope to transform the lives of patients with RA and other autoimmune diseases."